Table of Contents
Ultra short term funds, earlier referred as Liquid Plus Funds, are funds that invest in debt instruments having residual maturities of more than 91 days and typically less than 1 year(in some cases they may go upto 1.5 years). Ultra Short Term Funds are short term investments that are highly suitable for investors who are willing to marginally increase the risk of investment to earn good returns. Essentially, Ultra short Funds invest in money market securities and other debt instruments of short maturities, however, the average portfolio maturity of these funds is generally little higher than that of Liquid Funds.
Also known as Cash or Treasury Management Funds, Ultra Short Term Funds generally offer good returns that other types of Debt fund (like Liquid Mutual Funds).
Ultra-Short Term Funds are open-ended and the maturity period of funds varies from fund to fund. The maturity is very short(usually a couple of months) but longer than that of liquid funds. The investors can easily buy and sell the units of these funds as per the NAV (Net Asset Value) of the redemption day.
For Ultra Short Term Funds, the purchase happens on a (T+0) Basis. This means that the NAV is fixed on the same day as the funds reach the AMC. For e.g. for an investor purchasing the fund within the cut-off time on a Tuesday (and funds being realised), the NAV date applicable would be Tuesday itself.
Some Ultra Short Term Funds may have exit loads on exits made within very short periods of time (ranging from 7 days to 1 month). The period till which exit load applies may vary with funds. However, some ultra short terms funds do not have any exit loads also.
The returns may be paid to the investors in the form of Dividends (in the case of Dividend Funds) or in terms of appreciation of the fund NAV (in the case of Growth funds).
In the case of redemption, the process is the same for both liquid funds and Ultra Short Term Funds. For all redemption requests received by the AMC within the cut-off time (3 PM), the proceeds are paid to the customer the next day i.e. on a (T+1) basis. Albeit, if the request gets registered after 3 PM, the investors shall receive the redemption amount day after.
The minimum of Investing in Ultra Short Term Funds is INR 5,000 to 10,000 (on the retail plans).
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Ultra Short Term Funds are fixed Income investments that invest in money market instruments like Treasury Bills but these may be 91-Day, 182-Day or 360-Day Treasury Bills. They can also invest in CDs and CPs having residual maturities longer than 91 days. Moreover, it is sometimes understood that there is no credit risk in such portfolios. However, this is not the case. Any short term investment like Ultra Short Funds can give a negative return as well if there is a Default. But, most companies delay payments on longer-dated Bonds before they start defaulting on short term debt (since this would lead a freeze in short term credit). Also, the investors need to carefully look at the portfolio in these funds to assess the quality of instruments and be ready to take that risk.
Typically, the yield on a debt instrument is higher for instruments with longer maturities. Think of it as a way to reward the extra risk that investors take to be invested in the instruments for a longer period of time. In finance, this is called the liquidity premium Theory. Thus, securities in Ultra Short Mutual Funds usually earn a higher yield as compared to Liquid funds (albeit at a relatively higher risk). As a result, Ultra Short Term Funds may give marginally better returns than Liquid funds over comparable periods of time. So, make a sensible short-term investment in Mutual Funds by investing in Best Ultra Short term Mutual Funds to earn good returns with less volatility.
In the below table, the returns of Ultra Short Bond Funds received in the form of a dividend are tax-free in the hands of investors.
However, a Dividend Distribution Tax (DDT) is deducted at the source by fund houses, which is 25% in case of Debt Funds like Ultra Short Term Funds.
Liquid Funds | Liquid Funds | Ultra Short Funds | Ultra Short Funds | |
---|---|---|---|---|
Class of Investors | Individuals/HUF | Corporate | Individuals/HUF | Corporate |
Dividend Distribution Tax | 27.038% | 32.445% | 13. 519% | 32.445% |
Short Term Capital Gains | As per income tax Slab Rates | As per Income Tax Slab Rates | As per Income Tax Slab Rates | As per Income Tax Slab Rates |
(Please note, investors are advised to consult their Tax consultant before taking any decisions)
Below is the list of top funds have net assets over 100 Crore
and managing assets for atleast 3 years.
Fund NAV Net Assets (Cr) 1 MO (%) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) Franklin India Ultra Short Bond Fund - Super Institutional Plan Growth ₹29.7907
↑ 0.01 ₹5,188 0.7 1.8 3.6 8.3 7.3 7.9 Aditya Birla Sun Life Savings Fund Growth ₹423.191
↑ 0.02 ₹17,086 0.5 0.9 2.1 6.5 7.3 7.6 ICICI Prudential Ultra Short Term Fund Growth ₹21.5903
↓ 0.00 ₹8,853 0.4 1 2.2 6 7.1 7.5 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 9 Apr 21
To provide a combination of regular income and high liquidity by investing primarily in a mix of short term debt and money market instruments. Franklin India Ultra Short Bond Fund - Super Institutional Plan is a Debt - Ultrashort Bond fund was launched on 18 Dec 07. It is a fund with Moderate risk and has given a Below is the key information for Franklin India Ultra Short Bond Fund - Super Institutional Plan Returns up to 1 year are on The primary objective of the schemes is to generate regular income through investments in debt and money market instruments. Income maybe generated through the receipt of coupon payments or the purchase and sale of securities in the underlying portfolio. The schemes will under normal market conditions, invest its net assets in fixed income securities, money market instruments, cash and cash equivalents. Aditya Birla Sun Life Savings Fund is a Debt - Ultrashort Bond fund was launched on 16 Apr 03. It is a fund with Moderately Low risk and has given a Below is the key information for Aditya Birla Sun Life Savings Fund Returns up to 1 year are on (Erstwhile ICICI Prudential Regular Income Fund) The fund’s objective is to generate regular income through investments primarily in debt and money market instruments. As a secondary objective, the Scheme also seeks to generate long term capital appreciation from the portion of equity investments under the Scheme. ICICI Prudential Ultra Short Term Fund is a Debt - Ultrashort Bond fund was launched on 3 May 11. It is a fund with Moderate risk and has given a Below is the key information for ICICI Prudential Ultra Short Term Fund Returns up to 1 year are on 1. Franklin India Ultra Short Bond Fund - Super Institutional Plan
CAGR/Annualized
return of 8.5% since its launch. Return for 2020 was 4% , 2019 was 9.6% and 2018 was 8.7% . Franklin India Ultra Short Bond Fund - Super Institutional Plan
Growth Launch Date 18 Dec 07 NAV (09 Apr 21) ₹29.7907 ↑ 0.01 (0.03 %) Net Assets (Cr) ₹5,188 on 28 Feb 21 Category Debt - Ultrashort Bond AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆ Risk Moderate Expense Ratio 0.52 Sharpe Ratio 4.62 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 9.39% Effective Maturity 1 Year 7 Days Modified Duration 2 Months 23 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 16 ₹10,000 31 Mar 17 ₹10,953 31 Mar 18 ₹11,833 31 Mar 19 ₹12,923 31 Mar 20 ₹13,532 31 Mar 21 ₹14,624
Purchase not allowed Returns for Franklin India Ultra Short Bond Fund - Super Institutional Plan
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 9 Apr 21 Duration Returns 1 Month 0.7% 3 Month 1.8% 6 Month 3.6% 1 Year 8.3% 3 Year 7.3% 5 Year 7.9% 10 Year 15 Year Since launch 8.5% Historical performance (Yearly) on absolute basis
Year Returns 2020 4% 2019 9.6% 2018 8.7% 2017 8.2% 2016 9.7% 2015 9.7% 2014 10% 2013 10% 2012 10.3% 2011 9.4% Fund Manager information for Franklin India Ultra Short Bond Fund - Super Institutional Plan
Name Since Tenure Santosh Kamath 25 Oct 18 2.44 Yr. Pallab Roy 1 Jun 08 12.84 Yr. Data below for Franklin India Ultra Short Bond Fund - Super Institutional Plan as on 28 Feb 21
Asset Allocation
Asset Class Value Cash 25.19% Debt 74.81% Debt Sector Allocation
Sector Value Corporate 74.81% Cash Equivalent 25.19% Credit Quality
Rating Value A 40.45% AA 59.5% AAA 0.05% Top Securities Holdings / Portfolio
Name Holding Value Quantity JM Financial Credit Solutions Limited
Debentures | -10% ₹532 Cr 5,400 Indostar Capital Finance Limited
Debentures | -9% ₹441 Cr 4,400 Edelweiss Commodities Services Limited
Debentures | -7% ₹368 Cr 7,500 Edelweiss Commodities Services Limited
Debentures | -7% ₹363 Cr 3,650 Tata Realty and Infrastructure Limited
Debentures | -5% ₹237 Cr 2,000 Clix Capital Services Private Limited
Debentures | -5% ₹234 Cr 2,350 Clix Capital Services Private Limited
Debentures | -4% ₹200 Cr 2,000 PNB Housing Finance Limited
Debentures | -4% ₹192 Cr 1,910 Indostar Capital Finance Limited
Debentures | -3% ₹131 Cr 1,301
↓ -866 Clix Capital Services Private Limited
Debentures | -2% ₹100 Cr 1,000 2. Aditya Birla Sun Life Savings Fund
CAGR/Annualized
return of 7.7% since its launch. Ranked 6 in Ultrashort Bond
category. Return for 2020 was 7% , 2019 was 8.5% and 2018 was 7.6% . Aditya Birla Sun Life Savings Fund
Growth Launch Date 16 Apr 03 NAV (09 Apr 21) ₹423.191 ↑ 0.02 (0.01 %) Net Assets (Cr) ₹17,086 on 28 Feb 21 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.39 Sharpe Ratio 1.95 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 4.19% Effective Maturity 6 Months 7 Days Modified Duration 5 Months 19 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 16 ₹10,000 31 Mar 17 ₹10,881 31 Mar 18 ₹11,668 31 Mar 19 ₹12,599 31 Mar 20 ₹13,574 31 Mar 21 ₹14,434 Returns for Aditya Birla Sun Life Savings Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 9 Apr 21 Duration Returns 1 Month 0.5% 3 Month 0.9% 6 Month 2.1% 1 Year 6.5% 3 Year 7.3% 5 Year 7.6% 10 Year 15 Year Since launch 7.7% Historical performance (Yearly) on absolute basis
Year Returns 2020 7% 2019 8.5% 2018 7.6% 2017 7.2% 2016 9.2% 2015 8.9% 2014 9.7% 2013 9.5% 2012 9.7% 2011 9.2% Fund Manager information for Aditya Birla Sun Life Savings Fund
Name Since Tenure Sunaina Cunha 11 Oct 14 6.48 Yr. Kaustubh Gupta 15 Jul 11 9.72 Yr. Monika Gandhi 22 Mar 21 0.03 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 28 Feb 21
Asset Allocation
Asset Class Value Cash 52.32% Debt 47.68% Debt Sector Allocation
Sector Value Corporate 45.01% Cash Equivalent 34.23% Government 20.38% Securitized 0.38% Credit Quality
Rating Value AA 12.06% AAA 87.94% Top Securities Holdings / Portfolio
Name Holding Value Quantity 8.79% Govt Stock 2021
Sovereign Bonds | -4% ₹625 Cr 60,500,000
↑ 57,500,000 182 DTB 04032021
Sovereign Bonds | -3% ₹500 Cr 50,000,000 364 DTB 07052021
Sovereign Bonds | -3% ₹497 Cr 50,000,000 Mahindra & Mahindra Financial Services Limited
Debentures | -3% ₹446 Cr 4,450 182 DTB 11032021
Sovereign Bonds | -2% ₹400 Cr 40,000,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹399 Cr 4,000
↑ 4,000 Shriram Transport Finance Company Limited
Debentures | -2% ₹375 Cr 3,750 8.83% Govt Stock 2023
Sovereign Bonds | -2% ₹334 Cr 30,500,000 REC Limited
Debentures | -2% ₹329 Cr 3,200 Rural Electrification Corporation Limited
Debentures | -2% ₹320 Cr 3,150 3. ICICI Prudential Ultra Short Term Fund
CAGR/Annualized
return of 8.1% since its launch. Ranked 27 in Ultrashort Bond
category. Return for 2020 was 6.5% , 2019 was 8.4% and 2018 was 7.5% . ICICI Prudential Ultra Short Term Fund
Growth Launch Date 3 May 11 NAV (09 Apr 21) ₹21.5903 ↓ 0.00 (0.00 %) Net Assets (Cr) ₹8,853 on 28 Feb 21 Category Debt - Ultrashort Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 0.96 Sharpe Ratio 1.71 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load 0-1 Months (0.5%),1 Months and above(NIL) Yield to Maturity 4.91% Effective Maturity 5 Months 5 Days Modified Duration 4 Months 17 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 16 ₹10,000 31 Mar 17 ₹10,944 31 Mar 18 ₹11,704 31 Mar 19 ₹12,604 31 Mar 20 ₹13,601 31 Mar 21 ₹14,403 Returns for ICICI Prudential Ultra Short Term Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 9 Apr 21 Duration Returns 1 Month 0.4% 3 Month 1% 6 Month 2.2% 1 Year 6% 3 Year 7.1% 5 Year 7.5% 10 Year 15 Year Since launch 8.1% Historical performance (Yearly) on absolute basis
Year Returns 2020 6.5% 2019 8.4% 2018 7.5% 2017 6.9% 2016 9.8% 2015 9.1% 2014 14.8% 2013 3.1% 2012 9.4% 2011 Fund Manager information for ICICI Prudential Ultra Short Term Fund
Name Since Tenure Manish Banthia 15 Nov 16 4.38 Yr. Ritesh Lunawat 15 Jun 17 3.8 Yr. Data below for ICICI Prudential Ultra Short Term Fund as on 28 Feb 21
Asset Allocation
Asset Class Value Cash 41.25% Debt 58.75% Debt Sector Allocation
Sector Value Corporate 64.5% Cash Equivalent 24.17% Government 11.33% Credit Quality
Rating Value A 1.5% AA 39.16% AAA 59.34% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 19082021
Sovereign Bonds | -7% ₹615 Cr 62,500,000
↑ 62,500,000 REC Limited
Debentures | -3% ₹289 Cr 2,850 Reliance Ports and Terminals Limited
Debentures | -2% ₹207 Cr 2,019 Manappuram Finance Limited
Debentures | -2% ₹205 Cr 2,000 Housing Development Finance Corporation Limited
Debentures | -2% ₹152 Cr 1,500 Tata Value Homes Limited
Debentures | -2% ₹150 Cr 1,500 Aspire Home Finance Corporation Limited
Debentures | -2% ₹150 Cr 1,500 Tata Realty and Infrastructure Limited
Debentures | -2% ₹148 Cr 1,250 Power Finance Corporation Limited
Debentures | -2% ₹137 Cr 1,350 6.17% Govt Stock 2021
Sovereign Bonds | -1% ₹131 Cr 13,000,000
↑ 13,000,000
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